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N Korea 'stands by nuclear deal'

North Korea was supposed to shut down its Yongbyon reactor on April 14 [AP]

The comments come as North and South Korea prepare for a symbolic test of a cross-border rail service, the first time trains have run across the heavily-fortified border in more than 50 years.

Shut down

"Once the fund transfer is realised we are willing to immediately take steps to shut down our nuclear facility as agreed"

North Korean foreign ministry

Saying it was working to finally resolve the funds dispute, the foreign ministry in Pyongyang rejected allegations it said came from US media that it had been using the issue as a delay tactic.

"Once the fund transfer is realised we are willing to immediately take steps to shut down our nuclear facility as agreed,'' the ministry said.

Some $25m in North Korean funds was originally frozen in the account of Macau-based Banco Delta Asia after the US alleged the money was connected to North Korean counterfeiting and money laundering operations.

In response the North walked out of six-nation talks on its nuclear programme.

Earlier this year, however, the US agreed to unfreeze the account. In return the North agreed in February to begin moves to halt its nuclear weapons programme, shutting down its main reactor at Yongbyon.

Since then, though, the money has reportedly not moved from Macau and the North has missed a deadline of April 14 to begin shutting down the Yongbyon plant.

North Korea has said it will not begin the shutdown process until it is able to freely access and transfer the funds.

According to reports, Pyongyang had hoped to originally wire the $25m to an account in China, but banks have been reluctant to touch the money.

Train test

North Korea is making final preparation for the cross-border train run [Reuters]

Thursday's test of the inter-Korean rail link is being touted by South Korea as a rare milestone in reconciliation between the two Koreas.

Both sides remain officially at war, never having signed a formal peace treaty ending the 1950-53 Korean War.

The test will involve two trains running on lines on the east and west of the Korean peninsula.

The run will see celebrities, politicians and even a conductor from the last train to cross the border in 1951 on board the two trains - one starting in the North and one in the South.

Each train is expected to travel about 25km into the other side before returning.

Eventually, South Korea has said it wants to see regular services on the two lines, sending passengers and cargo into China and Russia and linking up with the Trans-Siberian railway to Europe.